Prof. Debashish Pradhan: Consumer Behaviour

Prof.
Debashish Pradhan
StickK.com
Consumer Behaviour
Group 6
Arnav Bisht
Dinesh Bhardwaj
Divya Saroja
Tanmay Bakshi
Ambar Mittal
Summary
The case on Stickk.com is based around Perception, Lifestyle and Personality of American
Consumers who are gripped by Obesity Epidemic. The case points out that Americans are more
likely to achieve their health goals if their money is on the stake as a wager in form of a contractual
liability. The idea of business rooted around the philosophy of commitment contracts and involves
marriage of behavioural economics to behaviour change. Stickk has been continually involved in B2C
business with couple of contracts with the corporations. CEO Jordan Goldberg is in conundrum to
venture into B2B model since it assures the company a steady cash flow rather than to engage into
B2C business model.
History
Stickk was founded by Jordan Golberg in early 2007, with infrastructure help from Yale
Entrepreneurship Institute. It was based on study of commitment contracts done by Prof. Karlan and
Prof. Ayers who also provided seed funding of $150,000. It relied of word of mouth and social media
marketing for publicity. Articles in Washington Post and Freakonomics proved very influential in
generating awareness and bringing people online. Stickk never did traditional marketing through
Google or facebook. In 2008 it secured series A funding of $860,000 from an Angel Investor. As of
2012 June, a total of $17 milion had been wagered.
Introduction
80% of StickK contracts dealt with goals related to weight loss and other health goals. A deluge in
business is generally seen around New Years when people make resolutions concerning their health.
Moreover people continue to stick to their fitness goals if they are threatened that their wager
money would be donated to the Anti-Charities. Such charities do not sync with the users personality
and harms their accepted social-self. A major deal with American Cancer Society provided StickK
10,000 dedicated users.
Obesity Epidemic
By 2000 the obesity rate has risen above 15% (as compared to 1985) for all the US states and more
than 30% of the Americans were gripped by Obesity. Obesity contributed to range of other health
problems from increased risk of heart attack, diabetes, depression etc. The cost to US-Health care
System because of obesity was $150 million. Beginning 2008 public health advocates especially in
New York mandated restaurants to provide, calorie content of all foods, some institutions made
calorie equivalent- steps chart, some made color coding to influence choices with red marked on
high calorie content food. StickK believed in the idea that Americans are well informed about
calories and it is their lifestyle and lack of motivation to pursue a successful healthy life plan.
Working of StickK
1. Setting Goal
User selected pre-set goals or own customized goals with time lines. 80% of the contracts on
the site were health related. Users/Referees reported progress weekly or one-shot failure
and success depending on the contract
2. Set Stakes
Users set stakes and selected their friends, charity or anti-charity as recipient in case they
failed their commitment. Anti Charity was the most popular and accounted for 50% of all the
stakes. StickK stored credit card information of the user and charged him only when the user
failed his commitment. Deducting amount initially and then refunding it back prevented
users to register and was also costly to StickK in terms of credit card transaction fees.
StickK took no money if the recipient was friend, 19.5% for Charity and 29.5% for Anti
Charity. Setting Stake was optional, success rate was highest, almost 80% ,when the
recipient was anti-charity. People were serious, honest and most of them self-reported their
numbers.
3. Set Refree
Some selected an impartial referee for monitoring the progress while others self-reported.
Some even appointed referee as the recipient.
4. Supporters
Identified supports for encouragement and daily appraisals on blogs and social media.
People were more likely to succeed since their reputation was at stake, which mattered to
them more than their money.
Stickk worked because people were driven to achieve their goal because their reputation and money
was at stake.
Competition & New Opportunity

StickKs competition included SparkPeople, PEERtrainer, Virgin Pulse, HeathyWage, Keas and all of
them competed for market share. Some even provided personal trainers and diet menu and
additional features to the users. StickK did two B2B contracts and had offer from additional two
firms. B2B contracts demanded their customized website, private label and would require a
dedicated account manager to maintain the affairs for the corporate client and team of designers to
develop private label specific to each client. But B2B contracts were huge opportunity and would
provide a dedicated source of revenue to the firm. Individual Customers were also growing rapidly
and StickK had limited resources to cater to both. Goldberg believe his small team would be much
better suited to serve the millions of individual customers.
In the increased era of competition acquiring individual customers would be a challenge and the
revenues are also dependent on the wagers of the users. Doing B2B business assures steady stream
of cashflows, loyal customer base and all the employees of the firm become users in shot.
Irrespective of the usage of the private label StickK would still be paid by the corporations. Corporate
reference/ recommendations would have higher credibility in getting new business than individual
word of mouth publicity. With these advantages importance of B2B business cannot be neglected.
Goldberg may get new hires and support staff and increase his team size to cater to this new
opportunity.

Prof. Debashish Pradhan: Consumer Behaviour

Uploaded by

Copyright:

Available Formats

Prof. Debashish Pradhan: Consumer Behaviour

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Prof. Debashish Pradhan: Consumer Behaviour

Uploaded by

Copyright:

Available Formats

Prof.

Competition & New Opportunity

You might also like